SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 1, 2000
OMEGA RESEARCH, INC.
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(Exact name of registrant as specified in its charter)
FLORIDA
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(State or other jurisdiction of incorporation)
0-22895 59-2223464
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(Commission File Number) (I.R.S. Employer
Identification No.)
8700 West Flagler Street, Miami, Florida 33174
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (305) 485-7000
N/A
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
This report addresses the issues regarding the timing of revenue
recognition and amendments to Omega Research, Inc.'s historical financial
statements as a result thereof that were discussed by the Company in its Form
10-Q for the quarterly period ended June 30, 2000. This report also addresses
(i) the Company's accounting for its October 1999 acquisition of Window On
WallStreet Inc., (ii) the primary impact that the Company's revised accounting
methods are expected to have on net revenues and operating income for the
quarterly period ended September 30, 2000 and the nine-month period ended
September 30, 2000, and (iii) the status of the Company's pending merger with
onlinetradinginc.com corp. ("OnlineTrading.com").
On or before November 14, 2000, Omega Research, Inc. ("Omega Research"
or the "Company") will release its third-quarter 2000 results and file its
Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2000.
The Company also expects to file on or before November 14, 2000 (i) a Form
10-K/A for the year ended December 31, 1999, (ii) a Form 10-Q/A for the
quarterly period ended March 31, 2000, and (iii) a Form 10-Q/A for the quarterly
period ended June 30, 2000. Additionally, by November 14, the Company, on behalf
of TradeStation Group, Inc. (f/k/a OnlineTrading.com Group, Inc.), expects to
file Amendment No. 3 to the Registration Statement on Form S-4 (the
"Registration Statement") that was originally filed on April 17, 2000 in
connection with the Company's pending merger with OnlineTrading.com. The
September 30, 2000 Form 10-Q and all of the foregoing amendments will address
comments of the Securities and Exchange Commission ("SEC") Staff communicated to
the Company in connection with its review of the Registration Statement. These
filings will adopt the SEC Staff's view that Omega Research's October 1999
merger with Window On WallStreet Inc. should be accounted for as a purchase and
not as a pooling-of-interests. They will also contain revisions as to the timing
of revenue recognition with respect to Omega Research's 1999 and 2000 sales of
its 2000i client software products. Revenue for 2000i product sales will now be
shown to have been recognized when payable (over the 12 to 16 month financing
term for these sales, as monthly payments are due), as compared to recognition
of revenue, net of provision for returns, upon shipment of the products. This
change results in a shift of 1999 revenues and earnings to 2000 and, to a lesser
extent, 2001.
These revisions, as a whole, are expected to shift approximately $3.1
million of net revenues and approximately $1.6 million of operating income (a
$2.9 million benefit as a result of revised revenue recognition offset by $1.3
million of amortization expense related to the Window On WallStreet acquisition)
to the third quarter ended September 30, 2000. These revisions are expected to
shift approximately $7.9 million of net revenue and approximately $5.3
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million of operating income (a $9.3 million benefit as a result of revised
revenue recognition offset by $4.0 million of amortization expense related to
the Window On WallStreet acquisition) to the nine-month period ended September
30, 2000.
For the six-month period ended June 30, 2000, the revisions, as a
whole, are expected to result in net revenues of $18.5 million, an operating
loss of $7.5 million and a net loss of $0.30 per share, as compared to the
previously reported net revenues of $13.8 million, an operating loss of $11.2
million and a net loss of $0.28 per share. While, under the revised methods, the
Company's operating loss decreased and net revenues increased for the six-month
period ended June 30, 2000, net loss increased $0.02 per share because the
income tax benefit previously reported in the June 30, 2000 financial statements
will be recorded in 1999. For the year ended December 31, 1999, these revisions
are expected to result in net revenues of $23.7 million, an operating loss of
$6.5 million and a net loss of $0.16 per share, as compared to the previously
reported net revenues of $42.9 million, operating income of $2.1 million and a
net loss of $0.04 per share.
All revisions described above (other than the purchase versus
pooling-of-interests revisions) relate solely to the sale by Omega Research of
its legacy client software products, which are no longer being marketed, and do
not affect the Company's current and planned Internet subscription and other
Internet-based services.
The Company believes that Amendment No. 3 to the Registration Statement
will address all of the issues the SEC Staff has raised in its review of the
Registration Statement. Accordingly, while no assurances can be given, the
Company believes that the pending merger with OnlineTrading.com will be
completed by year end. Omega Research and OnlineTrading.com have executed an
amendment, dated September 21, 2000, to their merger agreement that extended
until December 31, 2000 both parties' commitment to complete the merger.
Forward-Looking Statements.
This report contains statements that are forward-looking and are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. When used in this report the words "believes," "expects," "expected,"
"will," and similar expressions are intended to identify forward-looking
statements. All forward-looking statements are based largely on current
expectations and beliefs concerning future events that are subject to
substantial risks and uncertainties. Actual results may differ materially from
the results suggested herein. Factors that may cause or contribute to such
differences include, but are not limited to, the failure to consummate the
pending merger on a timely basis (or at all) due to the nature and extent of the
SEC Staff's comments as a result of its review of Amendment No. 3 to the
Registration Statement, or other reasons; unanticipated delays in the filings of
the SEC documents referred to in this report; and differences in third-quarter
2000 net revenues and operating income based upon completion of the review of
the third-quarter operating results.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
OMEGA RESEARCH, INC.
Date: November 2, 2000 By: /s/ Gregg F. Stewart
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Gregg F. Stewart,
Chief Financial Officer
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